The concept of Central Bank Digital Currencies (CBDCs) has progressed swiftly from theoretical discussions to international policy formulation. Nations worldwide are considering retail and wholesale CBDCs to improve the efficiency of payments, financial inclusion and monetary management. Among the most geopolitically important discussions is the possibility of CBDC integration between Brazil, Russia, India, China, South Africa and other nations that form the BRICS bloc. These countries together account for a substantial portion of the global population, resources, and growth.
Unlike Bitcoin, Ethereum and few other cryptocurrencies, CBDCs are centralized, legal tender issued by the central banks of sovereign nations. They are intended to be the digital equivalent of existing fiat currencies, utilizing digital technology to improve the efficiency and transparency of payments and settlements.
With the current BRICS nations and the inclusion of the new members of the emerging economies, the use of CBDCs is gaining traction as a means of cross-border settlement, de-dollarization, and financial cooperation. Although momentum is building, there has been no launch of a common BRICS CBDC thus far, and many challenges lie ahead.
However, an important development in the BRICS discourse on digital currencies came to light when the Reserve Bank of India (RBI) made a proposal. RBI proposed to formally connect the central bank digital currencies of the BRICS countries. This discussion is set to take place at the 2026 BRICS Summit to be held in India.
What Are CBDCs and Why Do They Matter?
Before delving into the BRICS news, it is essential to know what a CBDC is and why central banks are interested in them.
A CBDC is a digital form of a country’s fiat money that is:
- Issued and supported by a central bank
- A legal tender under national law
- Designed to be accessible via digital wallets and payment systems
Unlike cryptocurrencies, CBDCs are centralized, stable (as they are pegged to fiat money) and regulated.
The purpose of CBDCs is to merge the classic advantages of fiat money such as stability and central bank support with the benefits of digital currencies, such as instant payments, programmability and low costs. CBDCs can be used by the public or by financial institutions.
CBDCs generally fall into two categories:
Retail CBDCs: Accessible to the general public, potentially replacing or complementing physical cash.
Wholesale CBDCs: Used by financial institutions for interbank settlements and cross-border transfers.
Global CBDC Landscape: The Larger Picture
The emergence of CBDCs is not an exclusive phenomenon for the BRICS nations. According to the Atlantic Council’s CBDC Tracker, almost 137 countries and currency areas, accounting for 98% of global GDP, are exploring CBDCs. 49 countries are in an advanced pilot stage. Only a few, like the Bahamas, Nigeria, and Jamaica, have launched live CBDCs.
The global phenomenon of CBDCs has been driven by the following factors:
- Improving the efficiency of the domestic payment system
- Enhancing financial inclusion
- Lowering the cost of handling cash
- Improving the transmission of monetary policy
- Facilitating innovation in cross-border payments
Emerging economies believe that the introduction of CBDCs is a technological leapfrog, which will help mobile payments and access to financial services in countries where banking infrastructure is not well-developed.
BRICS and Central Bank Digital Currencies: The Strategic Context
The BRICS bloc, which was formed by the initial grouping of Brazil, Russia, India, China, and South Africa, has grown in recent years to include other nations such as Egypt, Ethiopia, Iran, the UAE, and Indonesia as partners and outreach countries. The economic and strategic vision of BRICS has often been articulated in terms of lesser reliance on Western financial infrastructure and more control over financial governance.
Financial collaboration in BRICS has taken the form of projects such as the BRICS Contingent Reserve Arrangement (CRA), which is meant to provide liquidity support to members in times of balance of payment difficulties.
At the same time, the following have been under discussion at the highest levels:
- Increased local currency settlement of trades
- Alternative payment messaging systems such as BRICS Pay
- Investigations into a possible common currency
- Integration of central bank digital currency infrastructure
The strategic context in which CBDCs operate is as follows:
- Facilitating faster and cheaper cross-border payments
- Less dependence on the SWIFT-controlled global financial network
- Partial de-dollarization of trade and finance
- Enhanced financial cooperation among member central banks
Despite these motivations, the pace of development is measured and proceeds with caution.
Current Status of BRICS CBDC Development
Individual Member CBDC Projects
Each of the original BRICS nations is working on its own CBDCs:
China (Digital Yuan)
China is considered the most developed BRICS nation in terms of CBDC development. Their digital yuan (e-CNY) has been tested in retail applications across the country, with a focus on mass adoption, government-subsidized payments, and programmable payments.
Key features:
- Retail focus
- Offline transaction functionality
- Programmable payments
- Inclusion in the existing payment systems
- Large-scale real-world testing
India (e-Rupee)
The digital rupee in India has gained millions of users since its retail launch in December 2022 and supports offline payments and integration with fintech wallets. The RBI’s efforts to promote the e-rupee include its integration with private digital wallet services.
Notable elements:
- Inclusion in existing banking systems
- Gradual implementation strategy
- Reducing reliance on physical cash
- Potential for cross-border experimentation
Brazil (Digital Real)
The development of the digital real (BRL) in Brazil is underway at a moderate pace, with discussions centered on financial inclusion and modernizing the payment system.
Brazil is developing a digital real with emphasis on:
- Financial inclusion
- Tokenized asset markets
- Banking innovation
- Programmable finance
Russia (Digital Ruble)
Development of the digital ruble is underway, initially driven by the need to develop alternatives amid sanctions pressure.
The digital ruble is viewed domestically as:
- A sanctions mitigation tool
- A means of strengthening payment sovereignty
- A mechanism for bypassing SWIFT-related constraints
South Africa
South Africa has been exploring wholesale CBDCs and frameworks to modernize interbank payments and improve cross-border efficiency.
However, despite these developments, none of the BRICS countries has operationalized their CBDC for international settlement or interoperability purposes as of early 2026.
Proposal for CBDC Linkage
In January 2026, the Reserve Bank of India (RBI) made a proposal to the BRICS countries to explore the possibility of linking their respective CBDCs to enable cheaper and faster cross-border payments for trade and tourism purposes, and perhaps to minimize their reliance on the U.S. dollar. If adopted, this proposal would be placed on the agenda of the 2026 BRICS Summit to be held in India.
The concept of linking CBDCs is an extension of the commitment to interoperability among national payment systems and represents a new focus on cross-border cooperation on digital currencies.
However, the following would be needed for its implementation:
- Interoperable technology standards
- Governance frameworks
- Methods for managing trade imbalances
- Cybersecurity and legal coordination
These are not trivial issues and are linked to broader questions of monetary sovereignty.
BRICS Pay and Payment Infrastructure
Another important aspect of the BRICS digital currency plans is BRICS Pay. It is a decentralized payment messaging system that has been conceptualized to facilitate payments in local currencies and digital assets across the member nations of BRICS. Founded in 2018, BRICS Pay is a collaborative initiative of financial and technological experts from the BRICS nations that seeks to make international payments transparent, less expensive, and independent of SWIFT-controlled infrastructure.
Although it is not a CBDC, BRICS Pay is considered to be the infrastructure that will enable future collaboration on digital currencies.
Implications for Global Payments and Monetary Systems
Cross-Border Payments Revolution
If the BRICS CBDCs are interoperable, the first implication would be the reduction of transaction costs and times for trade and tourism payments between BRICS countries. This is because the current system of correspondent banking requires several transactions, and the use of an intermediary currency such as the U.S. dollar would be eliminated with the interoperability of the BRICS CBDCs.
This would also be beneficial for businesses that have cross-border supply chains in emerging markets, as it could lower costs of operation and improve financial inclusion.
De-Dollarization and Geopolitical Dynamics
One reason the BRICS countries are working together on CBDCs is to reduce their reliance on the U.S. dollar in international trade and finance. This is often referred to as de-dollarization. However, it is not likely that the dollar will be completely replaced in the short term, but a multipolar currency system with the use of CBDCs could gradually reduce reliance on the dollar.
China and Russia, in particular, have pursued local currency settlements and the use of digital currencies to reduce exposure to Western financial sanctions and oversight. CBDCs could support these efforts by enabling alternative cross-border payment rails.
Financial Stability and Monetary Sovereignty
CBDCs provide central banks with new capabilities for financial stability and monetary policy. They improve the transparency of real-time transactions and can enhance AML/CFT regimes. However, central banks face the challenge of managing innovation risks, including disintermediation of commercial banks, cybersecurity risks and privacy issues.
The challenge of harmonizing CBDC policies across BRICS countries, with diverse economies and monetary systems, is not trivial.
Challenges and Obstacles Ahead
Technical and Governance Complexity
The integration of CBDC systems across national boundaries is a complex task from a technical perspective. The central banks will have to reach a consensus on messaging, settlement, risk management, liquidity management, and compliance.
The issue of governance, or who controls the infrastructure and who is responsible in the event of fraud or failed settlements, has not been addressed.
Regulatory Coordination
The regulation of CBDC systems, including AML/CFT, data protection, and digital identity, will have to be standardized. This will be a challenge for BRICS, given the differences in their legal frameworks and priorities.
Economic Policy Divergences
The economic policies of the BRICS nations differ substantially in terms of growth, fiscal policies, inflation, and capital controls. This makes it difficult to standardize monetary policies, particularly if the use of CBDC systems has an impact on capital flows and exchange rates.
Future Scenarios
There are three possible future scenarios:
Scenario 1: Independent Domestic CBDCs Only
Countries continue to develop their own CBDCs with minimal cross-border connectivity.
Scenario 2: Interoperability Framework
The BRICS CBDCs are made technically interoperable but retain their status as sovereign currencies.
Scenario 3: Hybrid Unit of Account
A digital settlement layer based on a basket or shared clearing system emerges.
The second scenario seems to be the most likely one in the medium term.
The Road Ahead
Despite the issues, the cooperation on BRICS CBDCs continues to be a high priority for many countries. The 2026 BRICS Summit, led by India, could move forward with the integration of CBDCs, interoperability and the development of a common digital payment system.
Furthermore, the development of payment infrastructure, such as BRICS Pay, and the study of standards could be the foundation for future implementation.
Although forecasts of a fully integrated BRICS digital currency remain speculative, the development of pilot projects, governance, and infrastructure development indicates real progress. Some experts have even posited that the ambitions may extend to an integrated currency or unit of account in the coming decades, but certainly not in the short term.
The development of BRICS CBDCs reflects the larger shift in the global financial system towards distributed digital currencies, multiple currencies, and cooperation among emerging nations.
Strategic Impacts of BRICS CBDC Initiatives
The BRICS CBDC initiative is more than just a technology test. It is a manifestation of the geopolitical transformation, a desire for financial independence, and a reaction to the shortcomings of traditional payment systems. By working towards the interoperability of CBDCs or the concept of linked digital currencies, the BRICS countries aim at:
- Fast and less expensive cross-border transactions
- Less reliance on existing financial infrastructure
- Increased economic cooperation among emerging economies
- A gradual shift away from the current global reserve currencies
Although the future course and implementation are still unclear, the current CBDC pilots and plans, including the linkage plan for the 2026 summit, show that the idea is no longer in the realm of theory but is increasingly shifting towards a strategic focus.
